Wheat Drops With U.S. Forecasting Bigger Global Reserves

Wheat futures fell in Chicago after a U.S. report boosted its estimate for world stockpiles more than expected.

Global reserves were raised 0.6% to 279.95 million metric tons. Prices for the food staple are being closely watched with global inflation on the rise. While bigger world wheat supplies might help take the edge off global food inflation, the stockpile figure remains at a five-year low.

USDA also left its estimate unchanged for Australian wheat production, when some expected it to increase.

“Wheat is suffering because it knows the Aussie numbers have to come up,” said Charlie Sernatinger, global head of grain futures at ED&F Man Capital Markets Inc. in Chicago.

Wheat prices fell as much as 2.2% to $7.535 a bushel on the Chicago Board of Trade.

Soybean futures fluctuated after the report said crops in top grower Brazil would shrink. Corn fell with the U.S. forecasting bigger-than-expected domestic production and stockpiles.

In Brazil, soybean output was cut to 139 million tons, down from 144 mllion, according to the U.S. Department of Agriculture’s monthly supply and demand estimate updates, known as WASDE. Analysts expected 141.6 million tons, according to a Bloomberg survey.

Dryness in South America is threatening soybean crops in Brazil and putting expectations for a record large harvest in doubt. A shortfall could boost world demand for U.S. beans. It could also lead to price increases that would contribute to worsening food inflation.

Traders currently are awaiting rains that could arrive next week in dry areas in South America, with that forecast helping to take soybeans off recent highs.

Soybeans briefly rose as much as 0.8% to $13.9725 a bushel before erasing gains following the report. Corn fell as much as 1.7% to $5.91 a bushel.

BNN Bloomberg

Tags: corn, prices, soybean futures, Production, Chicago, wheat futures, supplies